TSMC to take 10 percent stake in SMIC

EE Times reports TSMC has applied to the Taiwan government for approval to take a ten percent stake in Chinese foundry SMIC.

The expected move, is the result of the settlement of a lawsuit in November 2009, which found that SMIC (Shanghai, China) has been using trade secrets and infringed patents belonging to TSMC.

Under the terms of the settlement, SMIC agreed to pay TSMC $200 million plus SMIC stock and warrants for a total ownership of SMIC of 10 percent. However, TSMC was not able to exercise the warrants while the Taiwanese government maintained restrictions on Taiwanese companies investing in China. In February the government in Taiwan relaxed restrictions.